Publisher The Center on Philanthropy at The Beautiful Foundation

The Beautiful Foundation was founded in 2000 as a national community foundation. The purpose of the foundation is to create and promote philanthropy among the general Korean public as a way to establish a sustainable and systematic culture of giving at all levels of society. The Center on Philanthropy at The Beautiful Foundation, by conducting research and study and by running educational programs, strives to boos the level of expertise and professionalism of non-profit practitioners, and hopes to become a cornerstone in the effort to raise the standard of the culture of giving. Giving Korea 2016 copyrightc2016 by The Beautiful Foundation No portion of this publication may be reproduced written permission from The Beautiful Foundation. Permission for written excepts or reprints may be obtained by writing to The Beautiful Foundation. See www.beautifulfund.org for contact information Publisher The Center on Philanthropy at The Beautiful Foundation 6 Jahamun-ro 19-gil Jongno-gu Seoul, 110-350, Korea www.beautifulfund.org give@beautifulfund.org

Giving Korea 2016 The 16 th Symposium on Giving Culture Researched, Written and Published at The Center on Philanthropy at The Beautiful Foundation

2016 1. GIVING INDEX : Analysis of Giving in Korea 2015 2. A Comparison of fundraisers and donors perception toward Giving in Korea 3. About The Beautiful Foundation 4. About The Center on Philanthropy at The Beautiful Foundation

Giving Korea 2016 GIVING INDEX : Analysis of Giving in Korea

The 16 th Symposium on Giving Culture Giving Korea 2016 GIVING INDEX : Analysis of Giving in Korea 2016 Song, Heongjae Researcher, The Center on Philanthropy at The Beautiful Foundation Professor, University of Seoul, Department of Economics

In order to find out the status of individual donation, 2,500 people above the age of 19 years old were interviewed via wired and wireless phone around the country. Donation was defined as followed. Donation is a voluntary giving of money or goods to an individual or organization that is not directly related to oneself without the intention of return. The phone interview began with the explanation of the concept of donation and asking whether they have donated in the past year. The answer was limited to donation to organizations, and did not include expenses for congratulations and condolences, religious offering, and Buddhist alms. <Research Method> Research Design Respondents S u r v e y Methodology Survey Tool Men and women over age 19, nationwide Wired and wireless phone interview (Wired 49.0%, wireless 51.0%) Wired and wireless phone number (RDD) Sample 2,500 persons Sampling Method RDD after allocating gender, age and location Selection Method of Respondents Method of Weight Application Standard error Quota sampling method according to gender, age and location Contacted via wired and wireless phone, revised percentage, then applied weight according to gender, age and location (cell weight; registered population of Ministry of Interior as of end of January, 2016) In condition of random sampling, Confidence rate 95% ±2.0%p

1. Amount of donation and participation Donation participation rate was 45.61% in 2015. Donation rate has risen slightly near the beginning of the research in 2003, but is overall decreasing since then. <Changes in participation of donation> The average amount of donation has continuously increased since the beginning of the research with the average amount of donation of the respondents at KRW243,800 and the average of the overall donors at KRW567,600. The reason why the average donation amount had dramatically increased in 2015 compared to 2013 was because the research method had changed. Face to face research of 2014 has changed to phone survey in 2016, and two persons donated more than KRW100million (there was no donor who donated more than KRW100million during social research and before the 2014 Giving Korea research). When the two major donors are excluded, the average amount drops to KRW373,000 and shows similar pace of increase as before. However, there are major donors in Korea, so it is only right to include their amount in calculating the average donation amount.

< Changes in the average donation amount > (Unit: KRW10,000) 2. Major field of donation Domestic philanthropy ranked No.1 among donation fields at 58%, followed by international aid and NGO. The terms aid organization, international aid, citizen organization that was used until 2014 has been changed to domestic philanthropy field, international aid field, and NGO. As overlapping recipient organizations has been consolidated, the previous domestic philanthropy field that ranked first with 65~70% has been reduced to 58% while international aid which was at 9.3%~16.4% has increased. NGO has been increased to 10% range while it was around 3% when it was citizen organization. These changes seem to have occurred because of the changes in classifications, the interviewer asked whether they have donated and in what amount among different fields, and thoroughly explained about NGO field which was somewhat difficult to understand. Donation rate of international aid field and NGO seem to have increased since the previous research.

< Donation participation rate for different fields 2015> (Unit: %) < Donation rate of different fields 2007~2013 from Giving Korea 2014> (Unit: %) 2013(N=488) 2011(N=591) 2009(N=577) 2007(N=160) Recipient % Recipient % Recipient % Recipient % C h a r i t y 65.8 C h a r i t y 72.2 C h a r i t y 67.0 C h a r i t y 71.2 organization organization organization organization R e l i g i o u s 24.0 R e l i g i o u s 21.6 Vagabond 29.2 Vagabond 19.7 organization organization Vagabond 17.4 Vagabond 19.6 R e l i g i o u s 24.8 R e l i g i o u s 16.5 organization organization International 14.3 International 16.4 International 15.3 R e l a ti v e s, 9.5 aid aid aid f r i e n d s, neighbors R e l a t i v e s, f r i e n d s, 7.0 P u b l i c institutions 7.3 R e l a t i v e s, f r i e n d s, 9.7 International aid 9.3 neighbors a n d neighbors community P u b l i c institutions 6.1 R e l a t i v e s, f r i e n d s, 6.1 P u b l i c institutions 5.7 P u b l i c institutions 6.8 a n d neighbors a n d a n d community community community

C i t i z e n organization 2.9 P o l i t i c a l organization 4.3 P o l i t i c a l organization E d u c a t i o n 2.5 E d u c a t i o n 4.1 E d u c a t i o n institution institution institution P o l i t i c a l 1.8 C i t i z e n 3.2 C i t i z e n organization organization organization M e d i c a l 1.0 M e d i c a l 1.3 M e d i c a l institution institution institution Arts and 0.2 Arts and 0.5 Arts and c u l t u r e c u l t u r e c u l t u r e organization organization organization Others 0.4 Others 0.8 3.3 3.2 3.2 0.7 0.2 In summary, domestic philanthropy field continues to rank first but shows signs of decrease, while international aid field and NGO field are increasing noticeably. 3. Major research result of donation groups Major reasons why people donate, which were to help those in need, to experience joy to help others, and to fulfill responsibility as a citizen, showed similar proportions. Tax benefits and to return help received in the past ranked low among the responses.

< Donation motivation > (Unit: %) The most important selection criteria for donation organization was transparency and credibility, followed by field of activity or interest in beneficiaries of organizations. The fact that the greatest weight was placed on transparency and credibility shows that donors don t know much about donation organizations. In order words, people are not aware of what activities the organizations carry out, how they implement them, how the donation is used, so they prefer organizations that have these information accessible. Since it is unlikely for donors to put in efforts to learn about the transparency and credibility of organizations, it shows that donation organizations should endeavor to communicate their virtues. On the other hand, transparency and credibility, project effectiveness, awareness, etc. are used interchangeably, so it is important to research on people s definition of transparency. Also it should be noted that people may have answered transparency and credibility is important because they have been socially trained to do so.

< Selection criteria of donation organizations > (Unit: %) 4. Reason for not donating 64% of people who do not donate responded that they have donated in the past. So it can be inferred that the previous donation experience has affected one s attitude in donation. Please refer to the following graph. Both the people who don t donate but have experience donating and potential donors showed similar interest in donation, while those who have donated answered they didn t donate due to the reasons lack of faith in aid organizations, or lack of information on donation method at higher proportion than potential donors. This shows that it can be cautiously presumed that the people with donation experience are hesitant in donating due to lack of trust in aid organizations because of previous experience and inconvenience in finding organizations of their preference.

< Reasons why people don t donate> With experience of donation No (Unit: %) experience Not interested in donation 13.55 12.01 Financially unable to donate 51.12 63.77 Lack of faith in aid organization 20.85 11.39 Lack of information on aid 10.25 7.66 organization or donation method Think tax money should be used 1.88 2.07 Don t know/ No response 2.36 3.11 Total 100 100 5. Tax benefits on donation 66% of the respondents agreed that donors should get tax benefits since they are doing the government s work while 23% said no since it is an individual s choice. The responses were similar among donors and potential donors. < Need for tax benefits on donation > Related to tax benefits on donation made to religious donations, more people were against it, which was a meaningful finding. What is interesting is that donors were against tax benefits more than potential donors. This seems to be because there may be a lot of donors who don t donate to religious institutions and donors who believe religious offerings are personal choices while religious offerings and Buddhist alms were excluded from the category in this research. However, it is questionable whether this result is representative of all the donors.

< Opinions on tax benefits of religious donations> 6. Overhead proportion in aid organizations When asked how much proportion they think overhead cost, which is an administrative expense related to donations, takes up in total donation raised by aid organizations, general citizens predicted a little more than 30% and answered the appropriate level to be 20%. Although it is difficult to conclude, the response reflects people s negative perception on aid organizations using more operating expense than appropriate. < Projection of aid organization s overhead proportion > (Unit: %, person) Average S t a n d a r d deviation M e d i a n value Sample size Donor 20.79 0.49 20.00 911 Potential donor 19.11 0.55 20.00 903

Giving Korea 2016 A Comparison of fundraisers and donors perception toward Giving in Korea

The 16 th Symposium on Giving Culture Giving Korea 2016 A Comparison of fundraisers and donors perception toward Giving in Korea 송헌 Roh, Yeonhee 재 아름다운재단기부문화연구소연구위원, Researcher, 립대학교 The 경제학과 Center on 교수 Philanthropy at The Beautiful Foundation Professor, Catholic University of Korea, School of Social Welfare

1. Purpose of Research Donation is made by the donor, but on the other side, there is an NGO that systemizes the act of private donation. Considering the role a fundraising NGO plays as a mediator, it is meaningful to research on how fundraising takes place within the organization in order to find out how donations are made. Therefore, Giving Korea researched in 2016 on the perception of working-level fundraisers on the act of donation and the giving environment and made a comparative analysis with the results of the research on the perception of general citizens on the act of donation. 2. Research Method -Research on perception of working-level fundraisers on fundraising environment and donation: email survey carried out to 207 working-level fundraisers(purposive sampling) of NGOs -Research on the perception of general citizens on donation: phone survey carried out to 2500 general citizens 3. Features of respondents organization (25432107 working-level fundraisers) -Dedicated fundraising department: Yes(67%), No(37%) -Scope of donors: nationwide(63%) > local(25%) > global(12%) -Scope of beneficiaries: nationwide(44%) > global(33%) > local(23%) < Scope of donors and beneficiaries of fundraising organizations> (Unit: %) Scope Frequency Ratio(%) Community residents of NGOs 51 24.6 Scope of donors Nationwide citizens 131 63.3 Global citizens 25 12.1 Total 207 100.0 Community 48 23.2 Scope of beneficiaries Nationwide 90 43.5 Global 69 33.3 Total 207 100.0

4. Projection of fundraising environment by fundraisers Respondents answered on a scale of 4(good/slightly good/slightly bad/bad) on the question of actual donation amount, fundraising environment, and economic circumstances of the next year. The average score on actual donation amount of this year and the next year was 2.56, which is in between slightly bad and slightly good. On the question of fundraising environment within and outside of the organization, the average score was 2.17, which is closer to slightly bad. On economic circumstances, the average was low at 1.78, below slightly bad. < Projection of fundraising environment by fundraisers> Type of projection N Average Standard Minimum Maximum deviation value value (SD) Projection of donation amount 207 2.65.66 1.00 4.00 Projection of overall fundraising 207 2.17.68 1.00 4.00 environment Projection of impact of economic environment 207 1.78.59 1.00 4.00 Although the working-level fundraisers projected negatively on internal and external fundraising environment that affects the fundraising results, especially the economic conditions, they were slightly optimistic on achieving the donation target of this year and next year. This result shows both the positive and negative sides of the fundraising activities of the NGOs. The positive side is that despite the adverse fundraising environment, the respondents have the organizational competency, such as expertise and skills, to achieve stable results. The negative side is that although the respondents are aware of the changes in the environment, they do not understand the importance or the effect of the environment on the fundraising results.

5. Gap in perceptions of fundraisers and general donors 1) Donation preference and required area On preference of area of donation, fundraisers answered that donors prefer 1) domestic social welfare and 2) international aid, but the area that the fundraisers need the most is NGO operations. This shows there is a gap between the preferred area of donation by donors and actual area that needs the donation the most. However, considering that donor s behavior can change by the information the NGOs provide to the donors, this result is because the NGOs focused on aid activities for the domestic and international poor when raising funds. < Perception of fundraisers on donation preference of donors and required area> (Unit : %) Area Preferred area Required area Actual donation area Domestic social welfare and 58.5 24.2 58.0 philanthropy International aid 27.1 7.2 21.6 Education 3.9 5.8 4.6 Medical 1.4 6.3 3.1 Arts and culture 0.0 3.4 0.4 NGO 5.8 40.1 10.1 Community development 0.5 8.2 7.5 Red Cross 0.0 0.0 3.9 Political fund 0.0 0.0 1.1 Others 2.9 4.8 4.4 Total 100.0 100.0-2) Motivation for donation Regarding motivation for donation, donors and fundraisers both replied 1) to help those in need, 2) to experience joy in helping others, and 3) as a fulfillment of responsibility as a citizen.

We need to take cautious note that the perception that people donate out of sympathy is generally stronger among fundraisers than actual donors. However, the perception that people donate out of a sense of social responsibility is somewhat weaker among fundraisers. According to the Giving Korea research, social responsibility is increasing faster in proportion of donation motivation compared to personal sympathy. This shows that fundraisers in the field are partially unaware of the changes in the perception of donor s motivation for donation. < Comparison on the perception of donation motivation of fundraisers and general donors> (Unit : %) Item Fundraisers Donors (n=207) (n=1140) Joy to help others 25.6 29.6 To help those in need 41.1 30.8 To return help received in the past 4.8 5.4 Responsibility as a citizen 23.2 29.3 To receive tax benefits on donation 5.3 3.0 Others 0.0 1.8 Total 100.0 99.9 3) Selecting organization to donate On selecting organization for donation, fundraisers responded in the order of 1) credibility, 2) level of awareness, and 3) interest in beneficiaries, while donors responded in the order of 1) transparency and credibility, 2) interest in beneficiaries, and 3) recommendation by friends. What is interesting is that there was a big difference among fundraisers and donors on the level of awareness and a gap on recommendation by friends. The result shows that NGO fundraisers focus on raising awareness of their organization and increasing recommendation based on personal ties, while donors depend on other criteria when selecting their destination organization. However, both responded that credibility and transparency of organization were important criteria for the selection.

< Comparison on the perception of donation organization selection criteria of fundraisers and general donors> (Unit : %) Item Fundraisers Donors (N=207) (n=1140) Awareness level of organization 29.0 8.2 Transparency and credibility of organization 35.7 51.0 Introduction or recommendation by friends 14.0 8.8 Field of activity or interest in beneficiaries of organization 21.3 27.1 Others 0.0 5.0 Total 100.0 100.1 4) Reason for not donating There was a gap in the perception of fundraisers and those who do not donate on why people refrain from donating. Fundraisers believed that those people were not interested in donation itself rather than not being financially capable to donate. In the view of NGOs, it is difficult for them to change people s financial conditions or personal views, so their main focus of activities is to promote culture of giving among the general public. However, unlike what the fundraisers think, general citizens do not think they lack information on donation, which shows, this is not a big obstacle in donation. < Comparison on the perception of reason for not donating of fundraisers and potential donors> (Unit : %) Item Fundraiser Potential donor (N=207) (n=1360) Not interested in donation 38.6 12.9 Financially unable to donate 15.0 54.8 Lack of faith in aid organization 20.3 18.2 Lack of information on aid organization or donation method 20.3 9.4 Think tax money should be used 5.8 2.0 Don t know 0.0 2.7 Total 100.0 100.0

5) Overhead cost of fundraising organization Regarding overhead, respondents predicted a little more than 30% will be used as overhead cost and answered the appropriate level to be 20%. Fundraisers reported they use about 21% as overhead. This shows that general public is aware that part of their donation is used for the organization s overhead cost, and also that fundraising organizations should enhance trust of the public. < Actual overhead vs. projection> (Unit :%) General citizen Potential Item Subtotal Donor Fundraiser donor (n=2500) (n=1140) (n=1360) Actual usage 20.98 33.00 32.50 33.60 Projection - 20.00 20.80 19.10

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Introduction the Beautiful Foundation The Beautiful Foundation, the first community foundation in Korea The Beautiful Foundation was established by and for the citizens The Foundation is a public organization, run by the participation and assistance of citizens. Independent from any specific individual, company or group, the Foundation is operated for the advancement of a society in which citizens play a pivotal role. All the profits of the Foundation go back to benefit citizens and society. The Beautiful Foundation creates a beautiful giving culture The Foundation is constantly in need of regular donations and donors rather than temporary acts of compassionate or sympathetic donations. The Foundation tries to spread the culture of giving especially with "The Beautiful 1% Sharing Campaign". A society where all people give money for a good cause is what the Foundation envisions. The Beautiful Foundation heads for an abundant community Many people remain in the dark, suffering from isolation and helplessness. And it is true also that many are dedicating themselves to make society a better place anonymously. The Foundation supports the marginal class as well as the activities for public benefit, which expedite the realization of shared hopes and happiness among an affluent community. The Beautiful Foundation raises public funds Not everyone can establish a foundation. However, anyone can keep the money for a good cause in one's own name within the Foundation. The funds from Donors will be maintained within the Foundation in the Donor's name, like a never-drying fountainhead, being perpetually used to support citizens and societal endeavors. The Beautiful Foundation sets a new model The Foundation is run by experts from various professional areas, armed with

capability and morality. Its operation is most efficient and rewarding as to satisfy the wishes of the Donors. Projects and programs of the Foundation are to support sustainable activities for the public benefit. Transparent, fair management and devoted Staffs have created a new model for a public foundation. Contact The Beautiful Foundation 6 Jahamun-ro 19-gil Jongno-gu Seoul (03035), South Korea Phone E-mail +82 2 766 1004 give@beautifulfund.org Fax +82 2 3675 1230 Web-site www.beautifulfund.org - 33 -

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The Center on Philanthropy at the Beautiful Foundation, South Korea s first and only research institute focused on philanthropy, is a storehouse of knowledge on giving that offers scientific research and reliable statistics. In addition, it compiles an expansive store of data from other countries safeguarding long-standing traditions of philanthropy. Through research, education, publications, and information sharing, our center strives to further foster the culture of sharing and empower non-profit organizations in South Korea. The Center on Philanthropy at the Beautiful Foundation provides: Research on giving culture Research on giving trends in South Korea: In order to better promote giving culture and craft solid policy recommendations regarding donation, the Giving Index of Korea examines the status of donation and volunteering among South Koreans, as well as their perceptions and attitudes on philanthropy. Survey on corporate social responsibility: This survey identifies the status of corporate social responsibility among South Korean companies. In order to help encourage CSR, it supports an index tailored to the South Korean business environment. Featured research The Center also conducts featured research deemed essential to the promotion of giving culture in South Korea, such as research into tax and legal procedures related to philanthropic activities and studies on promoting giving among the wealthy. Giving Korea, an international symposium on giving culture Giving Korea is a venue for the dissemination of up-to-date trends and models in philanthropy at home and abroad, designed to offer insight for cultivating a more creative and mature giving culture in South Korea. The publications from Giving Korea are also available in English. Monitoring of key international research, networking with overseas philanthropic organizations - 35 -

The Center tracks international research trends on philanthropy and maintains partnerships with related organizations in order to further improve the quality of our research on giving culture. The data and other materials publicized by the Center on Philanthropy at the Beautiful Foundation are available through our Knowledge Sharing Archive https://research.beautifulfund.org Contact The Center on Philanthropy at The Beautiful Foundation 6 Jahamun-ro 19-gil Jongno-gu Seoul (03035), South Korea Phone +82 2 766 1004 Fax +82 2 3675 1230 E-mail research@beautifulfund.org Web-site www.beautifulfund.org - 36 -

People who work with the Center on Philanthropy at the Beautiful Foundation Board of Directors Chairman Kim, Young-jin Chair and CEO, Handok Pharmaceuticals Co., Ltd. Kim, Kee-soo Chair, Mohenz Ltd. Kim, Ryang President & CEO, Sam Yang Genex Corporation Kim, Il-sup CEO, Deloitte Anjin LLC Kim, Jung-wan CEO & President, Maeil Dairy Industry Co., Ltd. B o a r d Kim, Joong-min Chair, Staffbank Members Nam, Seung-wu CEO, Pulmuone Park, Young-mann Chair, Doosan Infracore Co., Ltd. Yoon, Jae-seung Daewoong Pharmaceuticals, Co., Ltd. Lee, Kang-ho President, Grundfos Pumps Korea Ltd. Chung, Mong-yoon Chair, Hyundai Marine & Fire Insurance Director Park, Seong-Yeon Professor, Graduate School of Businesse, Ewha Womans University Vice-director Han, Dong-woo Professor, Graduate School of Social Welfare, Kangnam University Kang, Chul-hee Graduate School University of Social Welfare, Yonsei Kim, Woon-ho Professor, Graduate School of NGO Studies, Kyung Hee University Rho, Yeon-hee Professor, School of Social Welfare, Catholic University of Korea Min, In-sik Professor, Division of Economics, Kyung Hee University Division of Individual Giving Research Fellow Park, Cheol Park, Tae-kyu Professor, School of Business Administration, Korea University Professor, University School of Economics, Yonsei Oh, Joon-seok Professor, School of Business Administration, Sookmyung Women s University Yun, Min-hwa Faculty Office Professor, Korea Human Resource Development Institute For Health&Wlefare Lee, Min-young Professor, Department of Social Welfare, The Cyber University of Korea Lee Hyung -jin CEO, Arche Publishing House Jung, Jin-kyung Professor, Department of Public - 37 -

Cho, Sang-mi Choi, Hye-ji Han, Jung-hwa Administration, Kwangwoon University Professor, Department of Social Welfare, Ewha Womens University Professor, Department of Social Welfare, Seoul Women s University Professor, School of Social Welfare, Soonchunhyang University Vice-director Jun, Sang-gyung Professor, University School of Business, Hanyang Kang, Hyoung-goo Professor, University School of Business, Hanyang Division of Corporate Social Responsibility Research Fellow Kim, Yong-june Kim, Ik-seong Lee, Sang-min Professor, Graduate School of Business Administration, Sungkyunkwan University Senior Institute Professor, University Researcher, Korea Small Business Department of Sociology, Hanyang Lee, Jong-kuk Professor, School of Business, Ewha Womans University Lee,Chang-min Professor, University School of Business, Hanyang Vice-director Park, hun Professor, Graduate School of Science in Taxation, University of Seoul Park, Nae-cheon Tax Accountant Division of Public Systems and Law Research Fellow Suh, Hi-youl Professor, University School of Tax Science, Kangnam Son, Won-ik Chief, R&D Center, Tax Deloitte Anjin LLC Song, Heon- jae Professor, Department of Economics, University of Seoul Won, Yun-hi President, University of Seoul Yoon, Tae-hwa Professor, Department of Accounting, Kyungwon University